LISBON, Portugal (AP) — The leaders of Spain and Portugal said Wednesday they want the European Investment Bank to play a bigger role in generating economic growth on the continent by financing more business projects.
The EIB is the European Union's financing institution, providing long-term loans to support investment. Like many countries across the continent, Spain and Portugal are in recession and are desperate to create jobs, but they lack funds, having promised to reduce their debts.
Increasing the investment power of the EIB might, some argue, help spur economic growth.
The EIB, whose capital comes from the 27 EU member states, last year put up €46.2 billion for EU projects, according to its 2011 annual report. Its capital was just over €232 billion ($300 billion) at the end of 2011.
Greater EIB investment would be particularly beneficial in Portugal and Spain, two of the weakest economies in the 17-country eurozone. Portugal needed a €78 billion ($101.6 billion) bailout to avoid bankruptcy a year ago, and investors worry that ailing Spain may also need a financial rescue.
Spanish Prime Minister Mariano Rajoy and his Portuguese counterpart Pedro Passos Coelho said in a joint statement after a summit in Porto, Portugal's second-largest city, it is "urgent" for the EIB to bolster its financial backing, especially for small- and medium-sized companies.
Both leaders vowed to abide by commitments to cut their countries' high debt loads, which have contributed to the 17-nation eurozone's difficulties.
Rajoy said a shortage of credit is putting a brake on growth and job creation, while structural reforms under way in both countries won't yield benefits in the short term.